also made the town of New Castle dry, and put it out of appellees' power to grant the license which they had issued appellant. New Castle v. Scott, 125 Ky. 545, 101 S. W. 944. Upon receiving information of the decision of this court, appellant at once closed his saloon, and ceased to sell spirituous, vinous, and malt liquors, and has not since done so.

It is insisted for appellant that the town of New Castle is entitled to retain only so much of the $500 license fee he paid it as will cover the period of 107 days during which he conducted his saloon under the license granted him; that is, from January 16, 1907, down to and including May 3, 1907, which would amount to $146.60; and that the remaining $353.40 which was paid by him to conduct the saloon under the license granted him for so much of the time as intervened between May 3, 1907, and January 16, 1908, should be repaid to him, as it was unearned by the town of New Castle, and was paid by him to its board of trustees without consideration and under a mistake of law. The board of trustees refused, however, to return appellant the $353.40 in question, and this action, as before stated, was brought by him to recover it. Appellees filed a general demurrer to the petition, which the court sustained and dismissed the action; hence this appeal.

in the town of New Castle as to whether such liquors should be sold within the corporate limits of the town; the election resulting in favor of the sale. In June, 1906, a vote was taken in the county of Henry, of which New Castle is the county seat, as to whether spirituous, vinous, or malt liquors should be sold therein, which resulted against the sale. Following the last election, the question of whether the vote in the county of Henry against the sale of liquors nullified that of the previous year, taken in the town of New Castle, arose, and, as the question had not then been passed on by this court, it seemed to excite quite a diversity of opinion among lawyers and laymen of the town and county. As appellant's license, which had been obtained before the taking of the vote in the county, was about to expire, and he, in good faith, desired to continue his saloon business, application was made by him in July, 1906, to the board of trustees of the town of New Castle for a license to sell spirituous, vinous, and malt liquors in the town for one year from July, 1906. The board, while conceding that appellant was, in point of character and otherwise, qualified to be intrusted with the business of conducting a saloon, refused him a license, as recited in the order or resolution, "for the sole reason that, in the opinion of said board, the election held in the county of Henry on June, 1906, by which the sale of spirituous, vinous, and malt liquors was prohibited in said county, deprived the board of trustees of said town of New Castle of the right to issue any license after that date for the sale of spirituous, vinous, or malt liquors in said town." Upon the refusal of appellees to grant appellant the license, he instituted suit against them in the Henry circuit court, in which a writ of mandamus was asked to compel them to meet in their official capacity, and entertain and pass upon his application for the license. The circuit court, upon the hearing, adjudged appellant entitled to the relief able lawyers throughout the state were then sought, and awarded him the writ. Thereupon appellees issued to appellant the license demanded, and collected of him therefor the regular license fee of $500. The license, owing to a delay in obtaining a decision of the circuit court upon the question raised by the application for the mandamus, was not received by appellant until January 16, 1907, and by virtue thereof he conducted a saloon in New Castle until May 3, 1907, at which time this court, to which appellees, without executing a supersedeas bond, had prosecuted an appeal from the judgment of the circuit court, rendered in the action for the mandamus, reversed that judgment, holding that the vote taken in the county of Henry in June, 1906,

So the question presented by the appeal is: Can appellant, the consideration having failed, recover the money claimed, which, though paid with knowledge of the facts, he nevertheless parted with under a patent mistake of law? When appellees refused appellant a license to continue for another year the sale of spirituous and malt liquors in New Castle, there was ample ground for an honest difference of opinion as to the effect of the county election against local option upon the election of the previous year, held in the town of New Castle alone, which had been in favor of local option. As

disagreeing upon the same question, it is
not surprising that appellant and appellees
did so. Appellant, in good faith, believed
that, as the people of the town of New Cas-
tle had, in the previous year, voted to per-
mit the sale of liquors within its corporate
limits, another vote upon local option could
not legally be taken therein for three years;
and therefore that the later election held
throughout the county of Henry, and which
resulted against the sale of liquors, had no
effect upon the election in the town.
the other hand, appellees, with equal good
faith, took the opposite view, and acted
upon it in refusing appellant license. As a
law-abiding citizen, appellant took the
matter to the circuit court of the county

On

for adjudication, and the judgment of that, for a liquor license than was authorized by court sustained his view of the law. Ap- the city charter, the payment was not a volpellees, while acquiescing in the judgment untary one, and he might recover from the to the extent of granting appellant license, city the amount paid in excess of the charas it directed, were nevertheless unwilling ter requirement. In principle the case suto accept it, so they prosecuted an appeal pra doe: not differ from the case at bar. to this court for a final adjudication, which In each case the amount paid to the city resulted in favor of their contention. In for a license was more than it was entitled the meantime they had the right, pending to receive. In the one case the amount paid the appeal, to supersede the judgment of was in excess of what the charter allowed; the circuit court, and thereby prevent the in the other, the payment was not above the issuance to appellant of license. This they amount fixed by law, but it was in excess did not do; but, instead, delivered him the of what the city was entitled to retain, belicense, for which he paid in the honest be- cause the privilege of selling liquors, which lief that the judgment of the circuit court the license conferred, failed by as much as in his favor would be affirmed by the court the alleged excess to cover the period for of appeals. In this he was mistaken, as he which it was issued. was in believing appellees had authority to grant him license, and as was the circuit court in rendering the judgment appealed from. The question at issue was so in volved in doubt as to render its solution practically impossible without a construction from the highest court of the state, which, if not satisfactory to those interested, would at least be final and conclusive. Obviously, in paying appellees the amount necessary to entitle him to the license demanded, appellant acted under a mistake of law; indeed, we may say that it would be difficult to imagine a payment of money under a clearer and more palpable mistake of law. And this court has more than once declared that, where money is paid under a clear mistake of law or fact, which, in equity and good conscience, should not be retained by the party receiving it, a recovery will be allowed. Brands v. Louis

ville, 111 Ky. 60, 63 S. W. 2; Underwood v. Brockman, 4 Dana, 318, 29 Am. Dec. 407; Ray v. Bank of Kentucky, 3 B. Mon.

514. 39 Am. Dec. 479.

The following admirable statement of this principle may be found in Northrop v. Graves, 19 Conn. 548, 50 Am. Dec. 264, quoted with approval in Louisville v. Anderson, 79 Ky. 339, 42 Am. Rep. 220: "We mean distinctly to assert that when money is paid by one under a mistake of his rights and duty, and which he was under no legal or moral obligation to pay, and which the recipient has no right in good conscience to retain, it may be recovered back whether such mistake be one of fact or law; and this, we insist, may be done both upon the principle of Christian morals and the common law." We are unable to see upon what principle of good morals or law appellees can justify their retention of the amount in controversy, or legally compel appellant to lose it. In the case of Bruner v. Clay City, 100 Ky. 567, 38 S. W. 1062, it was held that, where one was required to pay more

We do not agree with counsel for appellees that a license such as appellant paid is a mere tax, which, when voluntarily paid, cannot be recovered. It is true that a tax, when voluntarily paid, cannot be recovered, though illegally collected. Louisville & N. R. Co. v. Com. 89 Ky. 531, 12 S. W. 1064. But this rule is based upon considerations of public policy, and because the law provides ample means of correcting an illegal assessment before the process of collecting the tax begins; but a license such as appellant paid is on a different footing. As said in Com. v. Central Hotel Co. 121 Ky. 846, 90 S. W. 565, 12 A. & E. Ann. Cas. 172: "A license to sell liquor is for the purpose of regulating the traffic, and incidentally to raise revenue." "Taxes are levied and collected regardless of the will or consent of the taxpayer, and for the purpose of raising a revenue. The popular understanding of the word "license" undoubtedly is a permission to do something which, without the license, would not be allowable. The object of the license is to confer a right

that does not exist without the license.'"

In obtaining the license of appellees, appellant expected, and appellees intended, it to confer the privilege to appellant to sell liquors in New Castle for the period of a year. In point of fact he exercised under it the privilege for 107 days, for which appellees received, and are entitled to retain, $146.60. For the license granted appellant appellees received $353.40 more than they are entitled to retain; and the fact that this sum was paid voluntarily by appellant does not bar his right to recover it, as it was paid under a palpable mistake of law. We are therefore of opinion that the petition states a cause of action.

Wherefore, the judgment is reversed and cause remanded, with directions to overrule the demurrer, and for further proceedings consistent with the opinion.

E

(October 5, 1908.)

RROR to the Circuit Court of the Unit

The lease contains no stipulation authoriz-, er than that which he has expressly stipu-
ing the lessee to sublet to his employees any lated for.
of the surface for barns, residences, yards,
gardens, pasture lots, etc., as accessory to
and convenient for the operation of the
lessee's mining privileges; but the right to ed States for the Northern District of
the surface is expressly and clearly restrict- California to review a judgment in plain-
ed to so much as may be "necessary" for tiff's favor in an action brought to recov-
mining and producing; that is, for station-er the amount alleged to be due on a policy
ing and operating machinery, tanks, pipes, of fire insurance. Affirmed.
and the like, with the right of passage to
and from the same. The lessee could, there-
fore, assume no broader rights than those
named; and, when he undertook to deter-
mine for himself, if he did so undertake,
that he and his employees could occupy
the land to an indefinite extent for his own
convenience, he did so at his own risk, and
both he and they became trespassers as to

the land so taken.

The judgment of the Circuit Court reversing the judgment of the Court of Common Pleas is affirmed. The cause will be remanded to the Court of Common Pleas, with instructions to sustain the demurrer to the second and third defenses of the answer, and for such other proceedings in accord with this opinion as are authorized by law.

Judgment accordingly.

The facts are stated in the opinion.
Argued before Gilbert, Ross, and Morrow,
Circuit Judges.

Mr. Ralph C. Harrison, with Mr. T.
C. Van Ness, for plaintiff in error:

The phrase "occasioned by or through,"
found in the second subdivision of the ex-
emption clause of the policy in suit, does
not have, independently of its position in
that clause, the same meaning as the
phrase, "caused directly or indirectly," in
the first subdivision thereof.

Pennsylvania Co. v. Congdon, 134 Ind. 226, 39 Am. St. Rep. 251, 33 N. E. 796; Meysenburg v. Schlieper, 48 Mo. 434; Curry v. Chicago & N. W. R. Co. 43 Wis. 666; Kee Kan v. Alliance Assur. Co. 16 Haw. 674;

Case Note. — Liability of insurer for
fire caused by earthquake.
Apparently the question of an insurer's

Crew, Ch. J., and Summers, Spear, liability for a loss occasioned by fire due to Shauck, and Price, JJ., concur.

UNITED STATES CIRCUIT COURT OF

APPEALS, NINTH CIRCUIT. WILLIAMSBURGH CITY FIRE INSURANCE COMPANY OF BROOKLYN, Plff. in Err.,

V.

LEON WILLARD.

(90 C. C. A. 392, 164 Fed. 404.)

Insurance-earthquake.

1. Destruction of a building by fire spread from another building which is set on fire by an earthquake is not within the excep tion in an insurance policy against all direct loss or damage by fire, that the company shall not be liable for loss occasioned by or through any earthquake, where the clause of the exception follows another which excepted from liability for loss caused directly or indirectly by certain specified

causes.

earthquake is of recent origin, as no cases
passing upon the question have been found
except those growing out of the San Fran-
cisco earthquake and fire of 1906; neither
of in-urance, with one exception, discuss the
do any of the text writers upon the subject
question. In Richards, Insurance Law, 1909,
3d ed. § 280, it is said: “In California and
in other localities an earthquake clause is
sometimes employed [in fire insurance poli-
cies]. Its purpose is to relieve the com-
pany from loss caused by a convulsion of
nature. A defense under this exception us-
ually presents an issue of fact for the jury
as to whether the fire in question may not
have been proximately due to some other
cause than the earthquake. The burden is
on the insurer."

It was held in Commercial Union Assur. Co. v. Pacific Union Club (C. C. A.) 169 Fed. 776, that an exemption from liability "for loss caused directly or indirectly by earthquake" did not cover the destruction of insured property by a fire which might have been prevented but for the destruction of the water mains of the city. In answer to the contention of the insurance company that the earthquake was therefore the proximate cause of the loss, the court said that 2. A statute providing that when a peril point was without merit, as the contract is specially excepted in a contract of insur- of insurance was against all direct loss or ance, a loss which would not have occurred damage by fire, except when "caused directbut for such peril is thereby excepted, al- ly or indirectly by earthquake," and that it though the immediate cause of the loss was could not have been within the contemplaa peril which was not excepted, does not option of the parties to the contract that the erate to give the insurer an exemption wid-insurance company should be relieved from

Same-exemptions — scope.

PPEAL by defendants from a judgment Robinson v. Western U. Teleg. Co. 24 Ky. of the Circuit Court for Marion County L. Rep. 452, 57 L.R.A. 611, 68 S. W. 656. in plaintiff's favor in an action brought A defendant whose negligent act preto recover damages for injuries to property vents fire hose being brought to the scene alleged to have been caused by defendants' of a fire is responsible for the property negligence. Reversed. burned, that would probably have been saved but for his breach of duty.

thereupon rang the bell and tried in the usual manner to call defendant's operator at the exchange, in order to be connected with the telephone at the city hall, and summon the fire company. Defendant, however, through its gross and wilful negli

peated efforts, during an interval covering some twenty or thirty minutes, that he succeeded in getting Central to answer, and furnish the needed connection. In the meantime the fire had gained such headway that, when the fire department reached the scene, it was beyond control, and the build-gence, wholly failed to respond to said call, ings and their contents were totally destroyed. Each company filed a demurrer to the petition, and also filed a motion that plaintiff be required to furnish a list of the property contained in the building. This latter motion was sustained, and plaintiff filed a list of the property lost in the fire. The demurrers were overruled. Each company then answered, traversing the alle gations of the petition in so far as it sought to charge them with negligence, and pleaded affirmatively that plaintiff's loss was due to the negligence of its night watchman, and that this failure to promptly give the fire alarm was the proximate cause of the company's loss. Thereafter the defendant companies filed an amended answer, in which they charged that the plaintiff had the buildings and contents, which were destroyed by fire, fully insured, that the insurance company had paid the insurance, and that by reason thereof plaintiff had sustained no loss at all. A demurrer was sus tained to this amended answer. Plaintiff replied traversing the second paragraph of the answer, which completed the issues. Upon the issues thus joined a trial was had, which resulted in a hung jury. A second trial resulted in a verdict for $10,000 in favor of plaintiff, against both companies. Motions for a judgment notwithstanding the verdict and a new trial were in turn overruled, and the defendants appeal.

Several grounds are relied upon for reversal, chief of which is that the court erred in overruling the demurrers to the petition. After setting out at some length a description of the buildings burned, for which a recovery is sought, and the fact that plaintiff is a subscriber to defendant's telephone service, and that telephones are maintained in the offices of the city officials, the state of facts upon which plaintiff seeks to hold defendants liable, are pleaded as follows: "On July 5, 1907, the night watchman of plaintiff, in due performance of his duties, dis covered that the boiler house at plaintiff's manufactory was on fire, but that if the fire company could be promptly summoned the fire would be arrested before it could reach and burn the mill and other buildings, which were close to, but disconnected from, the said boiler house. The said night watchman immediately, at about fifteen minutes after 2 o'clock A. M., went to plaintiff's telephone, which was in good working order and duly connected with the exchange, and

or to give any evidence that any operator was at the exchange, and, though the night watchman continued for a considerable time to ring the bell and try to arouse the operator, he could not induce any response whatever. The said night watchman, after spending considerable time in the vain and useless effort to arouse defendant's operator at the exchange, then tried by shooting his pistol several times and in other ways to arouse other persons so that there might be assistance in rousing the fire company, and at about ten minutes before 3 o'clock, after the fire had communicated to the main building, and with the inflammable material therein contained, the fire bell was rung. The fire company within a few minutes thereafter reached the scene of the fire, but too late to save any portion of the plant or outfit, save the warehouse and contents on the south side of the main building. Plaintiff says that, but for the gross and wilful negligence of defendant in failing and refusing to respond to the call by plaintiff's watchman, and in failing and refusing to connect plaintiff's office telephone with that in the city hall, the fire alarm would have been given, the fire bell promptly rung, the fire company would have reached the fire at least one-half hour before it did reach it, and before the fire had extended beyond the boiler house, and the fire would in such event have been easily put out with no loss to plaintiff, save a very trifling amount of damage to the boiler house. Plaintiff says that, from the ringing of the fire bell to the arrival of the fire company at the plant, with reel, hose, and all equipments for fighting fire, much less time elapsed than had elapsed between the efforts of plaintiff's watchman to arouse defendant's operator and the spread of the fire beyond the boiler house, and, if reasonably prompt connection had been given, the fire company would certainly have been on the ground ready to control the fire and extinguish it while yet confined to the boiler house. When the said company did arrive, however, the unreasonable delay had been such, on account of defendant's negligence, that the main building had caught fire, and a large amount of material, finished and unfinished, therein contained, was so dry and inflammable that it was impossible for the fire company, with all the means at its command, to arrest the conflagration, and the necessary and inevitable result was that